ROLE OF INTERNET OF

THINGS IN MARKETING

SHUBHAM YEOLE
123049, IMG 12D
FORE School of Management
1
 CONTENTS
Sr. no. Title Pg. no.
CH. 1 Introduction 3
1.1 Problem statement 3
1.2 Objective 3
1.3 Methodology 3
1.4 Internet of Things 3
CH. 2 Literature Review 5
2.1 Timeline of IoT 5
2.2 Gartner hype cycle for IoT 6
2.3 IoT architecture 7
2.4 Key Technologies in IoT 8
CH. 3 IoT AS A TOOL FOR MARKETING 12
3.1 How can Marketers Use IoT 12
3.2 Leading the Way 13
CH. 4 Conclusion 14

References 15

2
 CHAPTER 1. INTRODUCTION

Development in technology is disrupting the way we live. The disruptive technology

like blockchain is disruptive the financial sector in a major way. It has found application not
only in financial sector but also in cyber security, data storage, insurance industry and many
other. In a similar way another disruptive technology is Internet of Things (IoT) which can
find application in variety of sectors. In this paper we will focus strictly on how it will impact
the marketing and retail industry. First, we will understand the concept of IoT and then we
will explore how it can be applied to the marketing industry and retail industry.

1.1 Problem Statement:

With the development of the new technology of IoT, what will be the impact of the
IoT on future marketing and how the marketers could use the advantage of this technology?

1.2 Objective:

Due to the lack of literature in marketing section in terms of Internet of Things, this
paper is aiming to analyze the potential of the IoT as a marketing tool during the business
activities. The research goal is to identify opportunities which would be caused during the
change of the new data era related to the internet of things for the organizations during the
business. The classification of marketing domains where the IoT is likely to play a role in the
future and identification of the main changes expected to happen in the marketer’s work
because of the IoT.

1.3 Methodology:

This research paper will follow the method of literature review to introduce the
Internet of Things to the audience and then move on to various application that can be found
in the aspect of marketing and retail sector. For this purpose, we will use the google scholar
for the existing literature. I will also use the data from industry analyst like Gartner to get a
clear understanding of the predicted future of our topic of interest.

1.4 Internet of Things:

Internet of Things is called by several other names like Web of Things, Internet of
Objects, Embedded Intelligence, Connected Devices and Technology Omnipotent,
Omniscient and Omnipresent. But the objective of this technology is same in the broader
sense. Internet of Things consist of two major terms ‘Internet’ and ‘Things’. Internet can be
defined as a global computer network providing a variety of information and communication

3
facilities, consisting of interconnected networks using standardized communication
protocols.

Whereas Things are the objects that are distinguishable in the real world. Things need
not be only electronic devices, but they can also be non-electronic objects like food, clothing,
equipment, furniture and even humans, animals and plants. In broader sense, “things” are the
real objects in this physical world.

Internet of things can defined as “a system of interrelated computing devices,

mechanical and digital machines, objects, animals or people that are provided with unique
identifiers (UIDs) and the ability to transfer data over a network without requiring human-to-
human or human-to-computer interaction.”

4
 CHAPTER 2: LITERATURE REVIEW

The extant literature has aimed for the IoT in a technical perspective. And this means that
most of the literature has been written for the technical fields and also the enabling
technologies of IoT. In addition, authors also have written the industry applications of IoT in
several domains. At the same time, they also raised the technical issues of from IoT which are
needed to be solved.
However, there are very limited researches from IoT in relation with marketing field.
Especially, how the future business activities would change based on the development of IoT.
Such as, the consumer relation management, retailing, logistics, product development, online
marketing, etc.

For this we reviewed article by Prof. Somayya Madakam for the basic definitions
and timeline (Internet of Things (IoT): A Literature Review; 2015). The research paper by
Xian-Yi Chen talks about the architecture, key technologies used in IoT. Usage of RFID,
Sensors, Cloud computing can be understood from this paper (Research on Key Technology
and Applications for Internet of Things, Xian-Yi Chen, Science direct).

Internet of things is the upcoming disruptive technology which can find many
applications in the real world. But there are many problems that it will have to solve. There
are lot of investment opportunities in the applications of IoT. This area is covered in the
research paper titled “The Internet of Things (IoT): Applications, investments, and challenges
for enterprises” by Kyoochun Lee.

According to Forbes and i-scoop.com there is variety of possibilities for the marketers that
can work in favour of brand to create a meaningful relationship.

2.1 Timeline of IOT:

1983: Ethernet is standardized, leading to further development in internet technology

1990: Presenter at the Interop networking conference control a sunbeam Deluxe toaster via
the Internet

1993: The U.S. government allows civilians to use GPS

1998: Computer scientist Mark Weiser builds a water fountain synched to changes in the
stock market

1999: Procter & Gamble executive Kevin Ashton coins the term “Internet of Things”, moves
to MIT to launch its Auto-ID Centre
5
2000: LG launches first Internet connected refrigerator

2002: Cloud technology takes hold with the launch of Amazon Web services

2007: CNET veterans James Park ans Eric Friedman launches Fitbit

2008: Internet of things was “born” according to CISCO, when there were more connected
devices than people

2009: Google tests self-driving technology Toyota Prius models on California freeways. St.
Jude Medical STJ introduces a wireless pacemaker that allows remote monitoring

2013: Google launches smart-glass; INTEL forms its IoT group

2014: Number of mobile devices and machines exceeds the world population; Cisco, GE,
AT&T, Intel and IBM form the industrial Internet Consortium to create IoT standards;
Amazon releases Echo to Prime members

2015: Mattle announces Wi-Fi barbie; Moocall commercially releases sensors to let ranchers
know when a cow is giving birth

2016: Apple releases HomeKit; Alphabet releases Google Home

2017: Lyft and G.M. plan to test autonomous taxis

2018: Cisco forecasts 10 billion mobile connected devices, 1.4 for each person

2020 (Predicted): Cisco predicts more than 50 billion connected devices by 2020; Gartner
estimates that 80% of all new vehicles will have data connectivity by 2020

2021(Predicted): BMW, Ford, Volvo say they will have fully autonomous cars

2.2 Gartner hype cycle for IoT:

Gartner, officially known as Gartner, Inc. is a global research and advisory firm
providing insights, advice, and tools for leaders in IT, Finance, HR, Customer Service and
Support, Legal and Compliance, Marketing, Sales, and Supply Chain functions across the
world. The hype cycle is a graphical representation of the life cycle stages a technology goes
through from conception to maturity and widespread adoption. The hype cycle is a branded
tool created by Gartner, an information technology (IT) research and consultancy company.
Gartner researches very deeply on variety of topics and it has developed a reference model
for implementation of IoT. Gartner defines IoT as “A network of dedicated physical objects
(things) that contain embedded technology to sense or interact with their internal state or the
6
external environment. This excludes general purpose devices such as smartphones, tablets
and PCs.”

In the model, the layers define what capabilities an IoT component, function or
process must possess, while the tiers define where a component, function or process operates
in the IoT architecture. The interfaces define how data and control flow into, out of and
through the system

Fig.1 Gartner Hype cycle 2016

According to this hype cycle from Gartner it will take another 5 to 10 years for
Internet of Things to gain mainstream adoption. As per the hype cycle report the IoT remains
on the peak of inflated expectations for the third year in a row as vendors push the hype even
higher, but most companies struggle to find use cases beyond proof-of-concept. Hence, we
can say that IoT can see a great explosion in its usage as it makes way into multiple
applications.

2.3 IoT Architecture:

7
According to the recommendations of the International Telecommunication Union, the
network architecture of IoT consists of the sensing layer, the access layer, the network layer,
the middleware layer and application layers.

Sensing layer: the main features of this layer are to capture the interest information large-
scaly by various types of sensors, identify intelligently, and share the captured information in
the related units in the network.

The access layer: this layer's main function is to transfer information from the sensing layer
to the network layer through existing mobile networks, wireless networks, wireless LANs,
satellite networks and other infrastructure.

Network layer: this layer's main function is to integrate the information resources of the
network into a large intelligence network with the Internet platform, and establish an efficient
and reliable infrastructure platform for upper-class service management and large-scale
industry applications.

The middleware layer: this layer's main function is to management and control network
information real-time, as well as providing a good user interface for upper layer application.
It includes various business support platform, management platform, information processing
platform, and intelligent computing platform.

Application layer: this layer's main function is to integrate the function of the bottom system,
and build the practical application of various industries, such as smart grids, smart logistics,
intelligent transportation, precision agriculture, disaster monitoring and distance medical
care.

2.4 Key Technologies in IoT:

Five IoT technologies are widely used for the deployment of successful IoT-based
products and services:

1. radio frequency identification (RFID);

2. wireless sensor networks (WSN);

3. middleware;

4. cloud computing;

5. IoT application software.

8
Radio frequency identification (RFID)

Radio frequency identification (RFID) allows automatic identification and data

capture using radio waves, a tag, and a reader. The tag can store more data than traditional
barcodes. The tag contains data in the form of the Electronic Product Code (EPC), a global
RFID-based item identification system developed by the Auto-ID Center. Three types of tags
are used. Passive RFID tags rely on radio frequency energy transferred from the reader to the
tag to power the tag; they are not battery-powered. Applications of these can be found in
supply chains, passports, electronic tolls, and item-level tracking. Active RFID tags have
their own battery supply and can instigate communication with a reader. Active tags can
contain external sensors to monitor temperature, pressure, chemicals, and other
conditions.Active RFID tags are used in manufacturing, hospital laboratories, and remote-
sensing IT asset management. Semi-passive RFID tags use batteries to power the microchip
while communicating by drawing power from the reader. Active and semi-passive RFID tags
cost more than passive tags.

Wireless Sensor Network (WSN):

Wireless sensor networks (WSN) consist of spatially distributed autonomous sensor-

equipped devices to monitor physical or environmental conditions and can cooperate with
RFID systems to better track the status of things such as their location, temperature, and
movements. WSN allow different network topologies and multihop communication. Recent
technological advances in low-power integrated circuits and wireless communications have
made available efficient, low-cost, low-power miniature devices for use in WSN applications.
WSN have primarily been used in cold chain logistics that employ thermal and refrigerated
packaging methods to transport temperature-sensitive products. WSN are also used for
maintenance and tracking systems. For example, General Electric deploys sensors in its jet
engines, turbines, and wind farms. By analyzing data in real time, GE saves time and money
associated with preventive maintenance. Likewise, American Airlines uses sensors capable of
capturing 30 terabytes of data per flight for services such as preventive maintenance.

Middleware:

Middleware is a software layer interposed between software applications to make it

easier for software developers to perform communication and input/output. Its feature of
hiding the details of different technologies is fundamental to free IoT developers from
software services that are not directly relevant to the specific IoT application. Middleware
gained popularity in the 1980s due to its major role in simplifying the integration of legacy

9
technologies into new ones. It also facilitated the development of new services in the
distributed computing environment. A complex distributed infrastructure of the IoT with
numerous heterogeneous devices requires simplifying the development of new applications
and services, so the use of middleware is an ideal fit with IoT application development. For
example, Global Sensor Networks (GSN) is an open source sensor middleware platform
enabling the development and deployment of sensor services with almost zero programming
effort. Most middleware architectures for the IoT follow a service-oriented approach in order
to support an unknown and dynamic network topology.

Cloud Computing:

Cloud computing is a model for on-demand access to a shared pool of configurable

resources (e.g., computers, networks, servers, storage, applications, services, software) that
can be provisioned as Infrastructure as a Service (IaaS) or Software as a Service (SaaS). One
of the most important outcomes of the IoT is an enormous amount of data generated from
devices connected to the Internet (Gubbi et al., 2013). Many IoT applications require massive
data storage, huge processing speed to enable realtime decision making, and high-speed
broadband networks to stream data, audio, or video. Cloud computing provides an ideal back-
end solution for handling huge data streams and processing them for the unprecedented
number of IoT devices and humans in real time.

IoT applications:

The IoT facilitates the development of myriad industry-oriented and user-specific IoT
applications. Whereas devices and networks provide physical connectivity, IoT applications
enable device-to- device and human-to-device interactions in a reliable and robust manner.
IoT applications on devices need to ensure that data/messages have been received and acted
upon properly in a timely manner. For example, transportation and logistics applications
monitor the status of transported goods such as fruits, fresh-cut produce, meat, and dairy
products. During transportation, the conservation status (e.g., temperature, humidity, shock)
is monitored constantly and appropriate actions are taken automatically to avoid spoilage
when the connection is out of range. For example, FedEx uses SenseAware to keep tabs on
the temperature, location, and other vital signs of a package, including when it is opened and
whether it was tampered with along the way. While device-to-device applications do not
necessarily require data visualization, more and more human-centered IoT applications
provide visualization to present information to end users in an intuitive and easy-to-
understand way and to allow interaction with the environment. It is important for IoT
applications to be built with intelligence so devices can monitor the environment, identify
10
problems, communicate with each other, and potentially resolve problems without the need
for human intervention.

11
 CHAPTER 3: IoT AS A TOOL FOR MARKETING

There can be many implications of using IoT as a tool for marketing research. As per
the analysis by Cisco, over 50 billion devices will be connected to the internet by 2020. This
can give us a rough idea what can be done with the data generated from these devices.
According to Forbes, some of the areas that we can look IoT playing a major role are:

1. On-demand services: High level of convenience is expected everywhere. IoT

increases consumer expectations of convenience, and if your marketing does not cater
to that expectation, then customers won’t think your product is worth the effort.
Marketing must react accordingly to both promise and deliver higher degrees of
convenience.
2. Smart marketing connects social data to online devices: Recently, one company
experimented with a vending machine powered by tweets. To get a product from the
vending machine, users must interact with it on Twitter. The new phase of marketing
needs to mitigate not only connected things with their owners, but also the social
interaction between the two.
3. Big marketing data is getting even bigger: With the IoT, data is mushrooming in size
and scope. The relationship between consumer and marketer deepens as the data
grows. more connectivity leads to more data, leads to smarter data, leads to more
relevant campaigns, leads to more customer engagement.
4. Smart marketing deploys specific solutions to thing-related problems: With IoT, the
degree of target marketing has grown in specificity. Effective marketing will not only
cater solutions to demographic and psychographic targets, it will also predict solutions
for the individual users of products. In other words, if your car is connected to the
Internet and the brakes are wearing out, wouldn’t it make sense for your car to direct
you to a local brake shop?

and talk to product development.

3.1 How can Marketers Use IoT:

• Analyze customer buying habit across platforms

• Gather previously unreached data about how consumers interact with devices
and products
• Gain deeper insights into where a customer is in the buying journey
• Provide real-time, point-of-sale notifications and targeted ads
• Quickly resolve issues to close sales and keep customers happy

12
 This process of marketing will mean that marketers will interpret enormous data from
our homes which can help them to shape trends and tailor their outreach. This type of
service will result in a relationship between brand and customer that is based on facts,
is relevant and helpful.

3.2 Leading the Way:

As we develop as a society and our devices get more connected to us we are surely
entering the IoT world. For starters we have devices like Apple watch which can detect our
medical hygiene continuously. Nest Thermostat is capable to create a temperature schedule
based on data gathered from a user’s daily routine and automatically adapts without any
complex programming involved. With multiple smart devices like fridge and oven we expect
to create a more subtle IoT world. Amazon’s Alexa, Apple’s Siri and Google’s assistant are
some example of IoT getting interactive with us.

13
Conclusion

From this study we can conclude, Marketing In the IoT world is the next big thing.
According to recent surveys, seasoned marketers think that the marketing impact of IoT will
outstrip the significance of big data, mobile marketing, personalized transactions, and
consumer experience. IoT doesn’t ignore those existing trends. It subsumes them in a vastly
interconnected world. But there still persist some issues with customer privacy and available
technology.

If a consumer presses the same button five times on her coffee maker, gets no coffee,
angrily tweets about the experience, and slams the door on her way out, IoT marketers can
analyse that behaviour, address the consumer’s dissatisfaction, order a replacement. Such is
the power of IoT and recent data shows that there is possibility that IoT will be popularly
functional by 2020 and commercially adaptable by 2022.

14
 REFERENCES

1. The Internet of Things (IoT): Applications investments, and challenges for

enterprises, In Lee & Kyoochun Lee.
2. Internet of Things (IoT): A Literature Review, Somayya Madakam, R.
Ramaswamy, Siddharth Tripathi
3. Research on Key Technology and Applications for Internet of Things, Xian-Yi
Chen, Zhi-Gang Jin
4. The Internet of Things (IoT): What is the potential of the internet of things (IoT)
as a MARKETING TOOL, Wenjie Gong
5. https://www.smartinsights.com/managing-digital-marketing/marketing-
innovation/7-examples-applications-internet-things-now/
6. https://www.i-scoop.eu/how-the-internet-of-things-impacts-marketing/

15